How to structure a new business
So you have an awesome business idea. Something unique. Something big. But what next? You’re onto something but where do you start? How do you structure this amazing idea to start a new business?
A splendid idea can strike you anytime and the success of your idea is dependent on how you choose to begin with it. Here is how you can build on your raw business ideas to get the best structure.
Your motivation to start your own business
Before you jump into the more strenuous steps of organizing your business idea, you need to be crystal clear about your motivation for starting a business. Your impulses need to be in the right place for this to be a fruitful journey.
Setting up a new business is a herculean task that will require you to dedicate a lot of time, money, and hard work. If you are not driven enough for this new journey, chances are you will find the journey too exhausting too soon.
Organizing your idea
When you stumble upon a breakthrough idea for a business there will probably be a tornado of jumbled thoughts in your mind. The first thing you need to do is to smooth out this mess.
To make sense of the chaos in your head and give the best structure to your business ideas follow the following three steps:
Step 1: Scribble away
This is the easiest step in this exercise. Innumerable inventions, movie plots, and book storylines started as scribble notes. Check out some of them here.
All you need to do is to pick up a pen and a notebook and just jot down every thought that crosses your mind. There is nothing big or small in this step. Every thought counts. Think but don’t overthink this one. This is just a preliminary ideas page.
Organize what you have written until now: This is a part of the first step itself where you can bifurcate all information you have written until now into two parts.
- Part 1: First part is to structure your business idea around what you know and how much
- Part 2: What you need to research
For instance, in part 1 you can put information like your contacts who can help you out or your financial position. In the second part you put down all information you feel requires you to research. While doing this you can make edits to any repeated thoughts and add what you feel may be missing.
Step 2: Gather more information
The next step is to start gathering more information. Clarify all your doubts and do away with all uncertainties. This is the part you need to research to figure out which business structure is the best for your idea. It can be anything from facts to figures surrounding your idea.
Step 3: Refine your information stack
Now that you have researched it's time to refine the information to give your new business a structure and figure out how you want to go about it. It is where you combine the information you collected with all your scribbled thoughts and simplify your thoughts.
Step 4: Repeat 1, 2, 3
Don’t be tired already. The journey has just begun. Repeating this process is how you enhance the structure of your new business idea and polish it into a concrete plan.
Every time you research, more questions will pop up in your head and every time you refine your stack of information you will find unnecessary things and fill in the missing pieces.
There is no minimum or maximum number of times you should do this. It depends on your satisfaction with your work.
Now that you have a solid idea of what you want it is time to seek some advice and validation from experienced people about which business structure is the best. Talk to as many people as you can and understand the response to your idea. After this step, you can once again refine your plan.
Yay or nay?
More than validation from others, it is important to see if you validate your idea.
Take a minute to let your idea sink in and then decide to assess your response to your own idea. Is it a yay or a nay? If it is a nay then consider going back to the plan and see what is it that bothers you about your plan.
Find the right people to partner up with
If the answer to the previous question was a yay, it is a good time to look for a collaborator who can take up half of your burden of the work.
Do spend some good time assessing people and identifying the values and persona you want to work with. This is important as you don’t want to be stuck with the wrong person in your perfect business plan.
Determine your product-market fit
Everything I have said until now is a generic idea of how to structure a new business. Now it is time to take it up a notch and rely on proven strategies for setting up a new business.
A summary of all steps involved in this is determining target customers, identifying your competition, assessing underserved customer needs, prototyping the product, and collecting responses to the product. Read more about determining a product-market fit here.
In this article, only the structure and product aspects of a business have been covered. There are other aspects like financial, legal, human resources, and many others that you will need to sort out before your idea is good to go for the market.
But until then, if you are satisfied with your business plan and have followed all the steps I have listed out, you can consider taking your game to the next level and start building your business.
Frequently asked questions
1. What are the 4 business structures?
- There are 4 common business structures namely, sole proprietorship, partnership, corporation, and S corporation.
2. How do you develop a business idea?
- A new business idea is developed by thorough research and analysis of the relevant market and consumer expectations. Business idea development also requires analyzing the competition and conducting market surveys to deem product-market fit.
3. How do I think of startup ideas?
Some great ways to develop startup ideas are:
- Businesses that solve problems of a large community
- Figure out everyday problems you and everyone else around is facing
- Challenge the ongoing practices and solutions with a new product or method
- Keep a journal to scribble ideas
- Be aware of everything happening around and new developments taking place in technology
4. What is a business plan format?
- A business plan format gives you a concrete framework of your ideas and strategies in a structured manner. It is a way for you to coherently analyze your ideas and make a plan.
5. What is a good business plan?
- A good business plan should be concise, i.e. not more than 30 pages with an executive summary of not more than 2 pages which summarises everything. A business plan must contain all information from the idea, product to power structure of the company, plan for finances, and analysis of consumer and competition.